What happens if a worker gets injured while renovating your kitchen or building your ADU? For California homeowners, the answer used to be unsettling – without proper workers’ compensation coverage, you could be liable for medical bills, lost wages, and lawsuits.
California’s Senate Bill 216 is changing contractor insurance requirements. While contractors must comply, homeowners benefit most from these protections.
Here at GreatBuildz, a free service that connects homeowners throughout California with reliable, thoroughly screened general contractors, we speak to homeowners every day about the importance of contractor insurance. Here are some key considerations:
What Is SB 216?
SB 216 requires most California licensed contractors to carry workers’ compensation insurance, even if they claim to have no employees.
Signed into law in September 2022, this bill closed a loophole that allowed contractors to skip workers’ comp coverage by claiming they didn’t employ anyone.
Key dates:
- January 2023: High-risk contractor classifications (concrete, HVAC, asbestos abatement, roofing, tree service) must carry workers’ comp regardless of employee status
- January 2028: All licensed contractors must carry workers’ comp or prove eligibility for exemption
The bottom line: contractors can no longer avoid workers’ comp by simply claiming “no employees.”
Why SB 216 Exists, and Why Homeowners Should Care
Before SB 216, contractors without employees weren’t required to carry workers’ comp. The problem? Many contractors claiming “no employees” were actually using day laborers, subcontractors, and 1099 workers without proper coverage.
When injuries happened, the fallout landed on injured workers with no coverage – and on homeowners who could be held liable.
How This Affects You
Under California law, if a contractor you hire doesn’t have workers’ comp and a worker gets injured on your property, you could face:
- Claims against your homeowner’s insurance for medical expenses
- Personal liability if the worker is deemed your “statutory employee”
- Lawsuits for medical bills and lost wages
- Work stoppages if licensing issues arise mid-project
SB 216 reduces these risks. When contractors carry proper coverage, injured workers have a clear path to benefits—one that doesn’t run through your finances.
Looking for a contractor with verified insurance? Call Now – 888.668.2454
Do Contractors Need Workers’ Comp Under SB 216?
Yes, in most cases.
| Contractor Status | Workers’ Comp Required? |
| Has employees | Yes—always |
| High-risk classifications (concrete, HVAC, roofing, asbestos, tree service)—even with no employees | Yes—since 2023 |
| All other classifications | Yes—by January 2028 |
| Joint venture with no employees + exemption filed | Exempt if properly documented |
What Happens When Contractors Don’t Comply
Non-compliant contractors face:
- Automatic license suspension
- Fines up to $5,000
- Inability to pull permits
For homeowners, this means hiring a non-compliant contractor can leave your project in limbo if licensing issues surface mid-construction.
How to Verify a Contractor’s Workers’ Comp Coverage
Verifying coverage is straightforward:
Step 1: Use the CSLB License Lookup
Visit www.cslb.ca.gov and use the free License Check tool. You can verify:
- License status (active, inactive, expired)
- Workers’ compensation status
- Disciplinary history
Step 2: Request Documentation
Before signing any contract, ask for:
- Certificate of Workers’ Compensation Insurance with current dates
- Certificate of General Liability Insurance
- Copy of contractor’s license
Step 3: Check the Details
Verify that:
- Policy dates cover your project timeline
- The contractor’s name matches their license exactly
- The insurance company is California-licensed
Red Flags to Watch For
Be cautious if a contractor:
- Refuses to provide insurance documentation
- Shows certificates with expired dates
- Claims “I don’t need workers’ comp”
- Gets defensive about verification questions
Pro tip: Call the insurance company directly if anything seems off. Fake or expired certificates are more common than you’d think.
Common SB 216 Myths
“My contractor doesn’t need workers’ comp! He says he has no employees.”
Under SB 216, many classifications require coverage regardless of employee status. Even contractors who truly work alone may use subcontractors or day laborers who aren’t covered, leaving you exposed.
“Subcontractors handle their own insurance.”
Maybe. If a subcontractor lacks coverage and gets injured on your property, the liability chain can extend to you. Verify that subs are insured, or that your GC’s policy covers subcontractor injuries.
“Small jobs don’t count.”
California law has no “small job” exception. Your liability exposure is the same whether it’s a $5,000 bathroom update or a $500,000 remodel.
“My homeowner’s insurance will cover it.”
Only partially…and often not how homeowners expect. Homeowner’s policies typically cover domestic workers (housekeepers, gardeners) working limited hours. Contractors and their workers generally fall outside this protection.
How GreatBuildz Helps Homeowners Stay Protected
At GreatBuildz, insurance verification is part of our contractor vetting process. Before any contractor is recommended:
- Workers’ compensation status is verified with the CSLB
- General liability coverage is confirmed
- License status and classifications are checked
- Contractor history is reviewed for complaints and disciplinary actions
When you work with a contractor through GreatBuildz, you start from a position of verified protection.
SB 216 FAQs
Does SB 216 apply to remodels and ADUs?
Yes. SB 216 applies to all licensed contractor work in California: kitchen remodels, bathroom renovations, ADU construction, and any project requiring a licensed contractor.
Can homeowners be sued if workers’ comp isn’t in place?
Potentially. Under California Labor Code § 2750.5, if a contractor without workers’ comp is injured on your property, that worker may be deemed your “statutory employee”, making you liable for their injuries.
How often should I verify coverage?
Before signing any contract, and again before work begins if there’s a gap. For longer projects, request updated certificates at major milestones.
What’s a “ghost policy”?
A minimum-premium workers’ comp policy for contractors with zero employees. It provides a certificate to meet legal requirements but no actual benefits. Ghost policies are legitimate for true sole proprietors, but verify the contractor’s work arrangement matches their coverage.
The Bottom Line
SB 216 protects workers from being left without coverage after injuries. It also protects you by ensuring more contractors maintain proper insurance.
What to do:
- Verify workers’ comp coverage before signing any contract using the CSLB lookup tool
- Request documentation with current dates
- Don’t accept “I don’t need it” as an answer
- Work with vetted contractors who’ve already proven compliance
When it comes to contractor insurance, you shouldn’t have to go it alone – GreatBuildz can help simplify your renovation experience. GreatBuildz is a free service that connects homeowners in Los Angeles, Orange County, Ventura, and San Diego with reliable, thoroughly screened general contractors and provides project support from start to finish.
Call now (888.668.2454) to chat with a real person about your project or visit our website for more information: www.greatbuildz.com
